understanding and preventing chargebacks and retrievals

Understanding and Preventing Chargebacks and Retrievals


Merchant Services, Inc. Document IM000102212007.0 Copyright 2007 Merchant Services, Inc. This document and the contents contained herewith remain the property of Merchant Services, Inc. Reproduction of this document or any part thereof by any means (electronic or otherwise) without the expressed written consent of Merchant Services, Inc. is strictly prohibited. Only printed copies with ‘Controlled Document – Do Not Copy” stamped in red are considered controlled copies. All other printed copies are considered Uncontrolled and may not contain the latest document revisions.

Table of Contents Introduction…………………………………………………………………………………………………………... 2 The Purpose of This Guide……….………………………………………………………………………... 2

Retrieval Requests………………………………………………………………………………………………….. 3

What Is a Retrieval Request? ........................................................................................................... 3 Life Cycle of a Retrieval Request …………………………………………………………………………. 3 Retrieval Request Letter Example ………………………………………………………………………... 4 Retrieval Request Letter Example Legend ………………………………………………......... ……….. 5 Salesdraft Definition ………………………………………………………………………………………... 6 Retrieval Related Chargeback Reduction Tips…………………………………………………............. 7

Chargebacks Overview …………………………………………………………………………………............... 9 What is a Chargeback? ……………………………………………………………………………………. 9 Life Cycle of a Chargeback ………………………………………………………………………. ………. 9 Chargeback Letter Example ……………………………………………………………………... ………. 10 Chargeback Advice Letter Example Legend ………………………………………………....... ………. 12 General Chargebacks Facts/Tips ……………………………………………………………….. ………. 14

Visa USA Chargeback Reason Codes …………………………………………………………………………. 15

MasterCard Chargeback Reason Codes ………………………………………………………………………. 16

Unauthorized/Fraud Related Chargebacks …………………………………………………………… ……… 17 Mail/Phone/Internet (Card Not Present) Transactions ………………………………………... ……… 17 Chargeback Reduction Tips ……………………………………………………………. ……… 17 Retail (Card Present) Transactions ……………………………………………………………... ……… 19 Chargeback Reduction Tips ……………………………………………………………. ……… 19

Credit/Refund Related Chargebacks …………………………………………………………………... ……… 20 “Credit Not Processed” Chargebacks …………………………………………………………... ……… 20 Chargeback Reduction Tips ……………………………………………………………. ……… 20 Recurring Transactions …………………………………………………………………………... ……… 21 Duplicate Transactions …………………………………………………………………………… ……… 21

Merchandise Not Received ……………………………………………………………………………… ……… 22 Chargeback Reduction Tips ……………………………………………………………………... ……… 22

Cardholder Disputes Quality of Merchandise/Services ……………………………………………. ……… 23 Chargeback Reduction Tips ……………………………………………………………………... ……… 23

Additional Acceptance Tips …………………………………………………………………………….. ……… 25 Contact Information ……………………………………………………………………………………………… 26


Page 2 of 26

Introduction

The Purpose of This Guide: The primary purpose of the guide is to give you a better understanding of how and why the Chargeback/Retrieval process operates, and how to remedy and prevent future Chargeback/Retrieval issues. Excessive Chargebacks can lead to losses for your business and in turn, a better understanding of the overall process will help to minimize Credit Card related losses. If you require additional information or support, please call 1-800-999-8674. Virtually all merchants at one point in their processing history will encounter a Retrieval Request and/or a Chargeback. A Chargeback or Retrieval is not necessarily indicative of poor business practices or fraudulent activity. Customers can exercise their Federal Fair Credit Billing Rights (Federal Regulation Z) and attempt to obtain satisfaction for goods or services purchased. Please remember, that this guide is intended to be used as an informational tool and does not guarantee that your business will not receive Chargebacks or Retrievals. Also, the information contained in this guide and all Chargebacks debited through EVO Merchant Services covers Visa and MasterCard settled transactions. All Chargebacks for American Express, Discover, etc, are considered “Non-Bankcard” and are processed directly by that corresponding company and not EVO Merchant Services. Please direct all related inquiries to such “Non Bankcard Chargebacks” directly to the corresponding company.


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Retrieval Requests

What is a Retrieval Request? A Retrieval Request is an inquiry initiated by a Cardholder directly to their Issuing Bank. This could be the first step in the chargeback process or the cardholder is questioning the transaction and/or requesting more information. Issuing banks may also initiate a retrieval request for investigation purposes. When a request is received, a legible copy of the transaction in question needs to be faxed or mailed back within the specified time-frame. If the merchant fails to respond to the request within the time-frame, the Cardholder’s Issuing Bank can automatically process a Chargeback. If the merchant fails to respond this is considered a “non-fulfillment of a retrieval request” which results in a chargeback and ultimately no recourse.

Life Cycle of a Retrieval Request

Basic Retrieval Request and Fulfillment Flow

Issuing

Bank

Inquiry Retrieval

Visa/ MasterCard Customer

Retrieval

Retrieval Request Letter

Merchant

Sales Draft

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Sales Draft

Sales Draft
Sales Draft


Page 4 of 26

Retrieval Requests

Retrieval Request Letter Example

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Page 5 of 26

Retrieval Requests

Retrieval Request Letter Example Legend

1. Merchant Number: Your Merchant Account’s corresponding twelve digit identification number.

2. Retrieval Reason: Reason/justification for the Retrieval Request transmitted by

the Issuing Bank.

3. Tran Amt: The total dollar amount of the Salesdraft that is being requested.

4. Tran Date: The date the transaction occurred of the Salesdraft being requested.

5. Post Date: The date the transaction in question posted to the Cardholder’s billing statement.

6. Settle Date: Date Retrieval Request was sent from the Issuing Bank to EVO

Merchant Services.

7. Case Number: Unique identification number assigned to the Retrieval Request. This number should present on all documentation sent in regard the Retrieval request to ensure that it is attached to the proper case.

8. Processing Reference: 23 Digit Unique identification number assigned by

Visa/MasterCard in reference to the transaction in question. This number was assigned when the transaction was initially processed.

9. Cardholder Number: Credit Card Number of the transaction in question.

10. Required Fields: All items listed in this field must be present and legible on the

Salesdraft in order for it to be considered a “Valid” Salesdraft.

11. Due Date: The Salesdraft that is being requested must be submitted to EVO Merchant Services no later than the indicated date. Failure to do so may result in a Chargeback that is not reversible.

12. Response Info: The request Salesdraft must be mailed or faxed to the specific

address/fax# in this field in order to ensure that it is attached to the proper case in a timely manner.


Page 6 of 26

Salesdraft Definition

Once again, a “Retrieval Request” is an official request from the Cardholder’s Issuing Bank asking for a copy of a “Salesdraft”. A proper Salesdraft must adhere to the following definition and is not open for interpretation as per Visa/MasterCard Operating Regulations. Providing documentation that does not meet the following criteria will not be accepted as a “Salesdraft” and the request will be considered “Unfulfilled” by Visa/MasterCard. This may result in a “Non-Reversible Chargeback” if a proper Salesdraft is not provided within the allotted time-frame indicated on the “Retrieval Request Letter”. A Salesdraft is defined as a transaction slip, receipt, or invoice that has the following criteria describing the Credit Card transaction in question. All of the following items must be present and legible:

Cardholder Account Number Transaction Amount Transaction Date Merchant Name/Location Expiration Date Cardholder Signature (only applicable for Retail Merchants)


Page 7 of 26

Retrieval Related Chargeback Reduction Tips

Definition: Non Reversible Chargeback: A Chargeback where there are no reversal rights.

Failure to provide a legible “Salesdraft” within the specified time-frame indicated on the “Retrieval Request Letter” may result in a Non-reversible Chargeback. Please adhere to the following tips in order to help reduce the probability of Retrieval Related Chargebacks:

Mail/Phone Order and e-commerce merchants are not required to

provide a Cardholder signature. However, a “Substitute Draft” and/or form must be supplied containing all of the above requirements plus a copy of the order invoice, proof of positive AVS, and if available, proof of delivery. Definition: Substitute Draft: A Salesdraft that is not the original terminal receipt or Authorization Record. Instead, it is a separate document that contains all of the required Salesdraft fields plus has the title “Substitute Draft” printed across the top.

Hotel guest folios, Car Rental agreements, Invoices, and any other type of contract and/or document describing what was purchased is strongly recommended to be sent along with the official “Salesdraft”.

Your Merchant Agreement requires that you retain all copies of your

Credit Card receipts for a minimum of 3 years after each transaction has been completed. The Issuing Bank can request a Salesdraft for up to three years.

Please be sure to file your transaction receipts by Credit Card number

and transaction date as opposed to just the Customer Name as the Issuing Bank is not required to provide a Customer Name. This will assist you in locating the Salesdraft in question in an efficient manner.


Page 8 of 26

Retrieval Related Chargeback Reduction Tips (continued)

In order to ensure timely processing of your Retrieval Request, please

be sure to send in all pertinent documentation directly to the specified address and/or fax number indicated on the “Retrieval Request Letter”. Sending the required documents to an alternate office and/or fax number may result in an unwanted delay in the processing of your request.

Please be advised that it is your responsibility as the Merchant to

ensure that the EVO Merchant Services receives a proper and LEGIBLE Salesdraft with all required fields on one page that are clear and readable. If you notice that your Credit Card terminal is beginning to produce “lightened” and/or “blurry” Credit Card slips, please contact your Technical Support Center ASAP to have this issue resolved.

In order to ensure accurate filing of your Salesdraft, please provide

each draft whether it is one or multiple requests on its own separate sheet of paper with the corresponding case number indicated on each page.

Please do not mail in Original Credit Card slips unless otherwise

instructed by an EVO Chargebacks Analyst that an Original Credit Card Slip is required to obtain a legible copy.


Page 9 of 26

Chargebacks Overview

What is a Chargeback?

A chargeback is the process an Issuing bank uses to handle a disputed transaction. Issuing banks are given certain rights under the credit card association rules to reverse a sales transaction. Chargebacks can be initiated by the Cardholder or by the bank itself. When a merchant receives a chargeback the funds are immediately withdrawn from the merchant’s account and returned to the bank. Chargebacks arise for several reasons including fraudulent cards, fraudulent transactions, erroneous data submissions/processing errors, and duplicate transactions processed. Additionally, chargebacks are performed due to Cardholder dissatisfaction of a transaction due to undelivered goods or services, defective merchandise, or non-receipt of merchandise/service. Merchants may dispute chargebacks dependant upon the chargeback reason code. The dispute of a chargeback is referred to as a Representment. In order to represent a chargeback, it must be performed within the specific time frame allowed for that chargeback reason code. All chargeback reason codes carry a different representment time frame. Additionally, the proper documentation must be provided. Letters received by EVO will indicate what and when documentation is required in order for you, our Merchant, to respond to the Chargeback.

Life Cycle of a Chargeback

Basic Chargeback and Representment Flow

Customer

Issuing Bank

Visa/ MasterCard

Merchant

Dispute Chargeback

Chargeback Notification Letter

Chargeback

Rebuttal Letter

Representment

Representment Representment Notification


Page 10 of 26

Chargeback Advice Letter Example (Page 1)

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Chargeback Advice Letter Example (Page 2) Important: This page of the Chargeback Advice Letter should always be completed and included when responding back to EVO Merchant Services.

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Chargebacks Overview

Chargeback Advice Letter Example Legend

1. Chargeback Reason: Explanation provided by the Issuing Bank explaining the exact reason why the Cardholder is disputing the transition.

2. Reason Code: Numerical code assigned by Visa/MasterCard to the exact

Chargeback Reason listed above. For example: Visa 75 = Cardholder Does Not Recognize Transaction

3. Merchant Number: Your Merchant Account’s corresponding twelve digit

identification number

4. Transaction Amount: The total dollar amount of the transaction being disputed.

5. Chargeback Amount: The exact amount the Cardholder is disputing. This amount may be partial to the Transaction amount as Cardholders are permitted to only dispute a portion of the total sale. One example would be if a Cardholder ordered two separate pieces of merchandise and only one was delivered successfully.

6. Action Taken: Research and steps taken by EVO Merchant Services.

7. Adjustment Reason: Provides further details on the reason why the Cardholder

is disputing the transaction and may provide further tips on how to reverse the Chargeback.

8. Response Due Date: The last possible date that a response letter can be

received by EVO Merchant Services in order to consider reversing the Chargeback successfully. This date is listed in multiple locations on the letter.

9. Initiating Bank: Name of the Cardholder’s Credit Card Issuing Bank that

submitted the Chargeback to EVO through Visa/MasterCard.

10. Adjustment Date: Date Chargeback was received by EVO Merchant Services and when a debit for the Chargeback Amount was processed to the Merchant’s business checking account.

11. Case Number: Unique identification number assigned to the Chargeback. This number should present on all documentation sent in regard the Chargeback to ensure that it is attached to the proper case.


Page 13 of 26

Chargeback Advice Letter Example Legend (continued)

12. Cardholder Number: Credit Card Number of the transaction in question.

13. Reference Number: 23 Digit Unique identification number assigned by Visa/MasterCard in reference to the transaction in question. This number was assigned when the transaction was initially processed.

14. Transaction Date: The date the transaction in dispute occurred.

15. Posting Date: The date the transaction in question posted to the Cardholder’s

billing statement.

16. Response Address: Address that all Rebuttal Documentation must be mailed to.

17. Fax Response Number: Fax Number that all Rebuttal Documentation must be

sent to. Merchant has the option to either mail in their response or fax it into the specified number.

18. Merchant Name: Merchant “Doing Business As”(D.B.A.) name as it is listed on

the Cardholder’s billing statement.

19. Contact Name: Please provide the name of an individual that a EVO Chargebacks Analyst may contact in the event that more information is needed to assist in Reversing the Chargeback.

20. Contact Number: Please provide a direct number of the individual specified

above.

21. Reversal Reason: Write in detail the reason why the Chargeback should be reversed along with specific dates, times, names, and all attempts to try to rectify the situation directly with the cardholder. If there is insufficient room, please write your response on a separate sheet of paper and please be sure to indicate the corresponding case number on the sheet.


Page 14 of 26

General Chargebacks Facts/Tips

Please be advised that Visa/MasterCard Chargeback Regulations are designed not only to protect Cardholders, but also you, the Merchant. A Chargeback is initiated by the Issuing Bank and in many instances, depending on the Chargeback Reason Code, you are given the opportunity to rebut or “represent” the Chargeback. However, in order to do so, you need to respond to the corresponding “Chargeback Advice Letter” with all pertinent documentation within the time-frames given.

To ensure timely processing of your Chargeback Response, please

submit all pertinent documentation directly to the specified address and/or fax number indicated on the “Chargeback Advice Letter”. Sending the required documents to an alternate office and/or fax number may result in an unwanted delay in the processing of your case.

When responding to multiple chargebacks, please indicate all pertinent

case numbers on every page to ensure that the documentation is attached to each individual case.

If you feel that you are not receiving your “Chargeback Advice Letters” in

a timely manner, you may choose to participate in our “Fax Notification” service. Simply fax in a letter signed by your Merchant Account’s primary guarantor. Please have the letter request that your account be set up for “Fax Notification” along with a valid and separate fax number. Going forward, all “Chargeback Advice Letters” will be faxed to that designated number the date the letters are printed. Please fax this request to 516-962-7834 Attention: Fax Notifications.

Whenever, you receive a new “Chargeback Advice Letter”, the first step

taken should always be to research if you have already issued a Credit for the transaction in dispute. If you discover that you have issued a credit for the transaction in question, please fax us a copy of the credit slip along with a brief letter explaining that you have issued credit. Please notify us of a credit, REGARDLESS, if the “Chargeback Advice Letter” states if the Chargeback is Non-Reversible or not. If you did not issue a credit but feel that the Cardholder is due a credit, PLEASE DO NOT issue a credit at that time as the Chargeback has already remedied the dispute and the Cardholder has already received reimbursement for the transaction.

Please be advised that the Cardholder Letter and/or the Cardholder’s

name are not required to be provided by the Issuing Bank. The Issuer is permitted to provide an exhibit with an explanation of the dispute as Chargeback Documentation.


Page 15 of 26

Visa U.S.A. Chargeback Reason Codes

CODE CHARGEBACK REASON 30 Services Not Provided or

Merchandise Not Received 41 Cancelled Recurring Transaction 53 Not as Described or Defective Merchandise 57 Fraudulent Multiple Transactions 60 Requested Copy Illegible or Invalid 62 Counterfeit Transaction 70 Account Number on Exception File 71 Declined Authorization 72 No Authorization Obtained 73 Expired Card 74 Late Presentment 75 Cardholder Does Not Recognize Transaction 76 Incorrect Transaction Code 77 Non-Matching Account Number 79 Requested Transaction Information Not

Received 80 Incorrect Transaction Amount or

Account Number 81 Fraudulent Transaction –

Card Present Environment 82 Duplicate Processing 83 Fraudulent Transaction –

Card Absent Environment 85 Credit Not Processed 86 Paid By Other Means 90 Services Not Rendered –

ATM or Visa TravelMoney Transactions 93 Risk Identification Service (RIS) 96 Transaction Exceeds Limited Amount (Floor

Limit)


Page 16 of 26

MasterCard Chargeback Reason Codes

CODE CHARGEBACK REASON 4801 Requested Transaction Information Not

Received 4802 Requested/Required Information Illegible or

Missing 4807 Warning Bulletin File 4808 Requested/Required Authorization Not

Obtained 4812 Account Number Not on File 4831 Transaction Amount Differs 4834 Duplicate Processing 4835 Card Not Valid or Expired 4837 No Cardholder Authorization 4840 Fraudulent Processing of Transaction 4841 Cancelled Recurring Transaction 4842 Late Presentation 4846 Correct Transaction Currency Code Not

Provided 4847 Exceeds Floor Limit-Not Authorized and

Fraudulent Transaction 4849 Questionable Merchant Activity 4850 Credit Posted as a Purchase 4853 Cardholder Disputes–Merchandise/Services

Defective/Not as Described 4854 Cardholder Disputes–Not Elsewhere

Classified (U.S. Region Only) 4855 Non receipt of Merchandise 4857 Card Activated Telephone Transaction 4859 Services Not Rendered 4860 Credit Not Processed

4862 Counterfeit Transaction Magnetic Stripe POS Fraud

4863 Cardholder Does Not Recognize-Potential Fraud (U.S. Region Only)


Page 17 of 26

Unauthorized/Fraud Related Chargebacks

Mail/Phone/Internet (Card Not Present) Transactions

Card Not Present transactions such as Internet and Mail/Telephone (MO/TO) transactions, have a greater risk of Unauthorized/Fraud related Chargebacks. Please be advised that if it is possible to obtain a swipe and/or an imprint of the Credit Card at the time of the sale, it is recommended you do so. If it is not possible and/or your business type does not allow you to do so, please adhere to the following precautions:

Chargeback Reduction Tips

Utilize “Address Verification Service” (AVS): Using AVS and obtaining

a positive response of “Y” is a Visa/MasterCard requirement in order to successfully reverse an unauthorized related Chargeback. If the AVS system indicates that there is a negative or a partial match, you should use caution when completing the sale as this type of response will not allow for a potential Chargeback to be reversed. The AVS system is a fraud prevention service that logs the billing address that the Cardholder provides to you and compares it to the address the Issuing bank has in their database.

Ship merchandise to the AVS address and retain proof of shipment:

Once again, this is a Visa/MasterCard requirement in order to successfully reverse an unauthorized related Chargeback. If the Cardholder wishes to have merchandise sent to an alternate address, you should proceed with caution as not providing “proof of shipment” that indicates the matched AVS address would not allow for a potential Chargeback to be reversed. In addition you should also attempt to obtain signed proof of that the merchandise was received by your customer.

Be wary of foreign shipping addresses: Most Issuing Banks will give

you a “negative” AVS response in regards to foreign shipping addresses, thus negating your ability to successfully reverse a potential Chargeback. In addition, sending merchandise to a foreign address greatly increases your chances of receiving an Unauthorized/Fraud related Chargeback.


Page 18 of 26

Chargeback Reduction Tips for Mail/Phone/Internet (continued)

CVV/CVC2: This is a security feature that is printed on the back of all Visa

and MasterCard credit cards. Please contact your Customer Service Center for more information on obtaining and using this feature. Please be advised that this is an additional security tool, however, it cannot be used to help reverse an ”Unauthorized/Fraud” related Chargeback.

Business Name and Customer Service Number: Make sure that your

“Business Descriptor” that transmits to the Issuing Bank properly identifies your business name and that it is a description of the business that your customers will recognize on their monthly billing statements. In addition, you should also transmit your Customer Service Telephone Number to the Issuing Bank. This will promote your Customers to attempt to resolve the dispute directly with you over the phone as opposed to them processing a Chargeback. Please contact your Sales Representative in order to ensure that all of your information is correct.

Multiple Orders: Keep track of multiple orders coming in on one Credit

Card and/or being shipped to the same address. By implementing a policy of only accepting a limited amount of transactions from a specific card, customer, or a specific address in a given timeframe (hourly, daily, monthly), you may reduce potential fraud.

PLEASE BE ADVISED: Even if you follow all of the above referenced guidelines and successfully reverse an Unauthorized/Fraud related Chargeback, the Issuing Bank may decide to pursue the dispute further and process a Second Chargeback or take the dispute to Arbitration. At that time, Visa/MasterCard will make a decision at their discretion and may still rule in the Issuing Bank’s favor.


Page 19 of 26

Retail (Card Present) Transactions

In a Retail environment, you should always obtain proof that the Credit Card used in the transaction was present. The most common method is to simply obtain a full magnetic swipe of the card. If you are unable to swipe the card (i.e. magnetic stripe is scratched or unreadable), you must obtain a manual imprint of the Credit Card. In the event of an Unauthorized/Fraud related chargeback, the Issuing Bank is attempting to see if you, the Merchant, performed any errors in properly processing the transaction in question. In addition to obtaining proof the card was present; please also adhere to the following precautions:


Be sure your location has a manual imprinter: If your location does not have a manual imprinter, please call your Sales Office to obtain one immediately. If you do indeed obtain a manual sales slip, please be sure that the entire imprint of the card is legible and that the slip contains the transaction date, purchase amount, authorization code, and merchant information including location address. Failure to obtain a manual imprint or a full magnetic swipe could result in a Chargeback for “Fraudulent Transaction - no imprint/swipe obtained”

Obtain the Cardholder’s signature: Regardless of whether the card was

swiped or manually imprinted, you must always have the cardholder sign the Credit Card receipt. Once obtained, as an additional security measure, match the Cardholder’s signature on the receipt with the signature on the back of the Credit Card. Failure to obtain a proper signature on the Credit Card receipt can result in a Chargeback for “Fraudulent Transaction – no signature obtained”.

Always obtain a valid Authorization Number: The most common method of

obtaining a proper Authorization Number is to simply have the terminal “dial out” for the authorization. If you are instructed to call for an authorization, please be sure you call the designated number that was provided to you for authorizations and you accurately log the correct Authorization Number once it is verbally given to you over the phone. Do not call the telephone number on the back of the Cardholder’s Credit Card. Failure to obtain a proper Authorization Number can result in a Chargeback for “Authorization Not Obtained”.

Restaurant Delivery Personnel: Should always travel with a portable imprinter

to obtain an imprint of their customer’s card and to be used to create a complete and proper Salesdraft. If your location does not have a sufficient supply of portable manual imprinters, please call your Sales Office to obtain one immediately.


Page 20 of 26

Credit/Refund Related Chargebacks

“Credit Not Processed” Chargebacks

In order to prevent “Credit Not Processed” related Chargebacks, you should process credits to Customers who deserve them as quickly as possible. Your Customers should always be made aware of your refund/cancellation policies in writing. A Credit must be issued to the same Credit Card number that was used in the original transaction and you should never refund a Credit Card transaction by cash or check. In addition to the aforementioned policies, please also adhere to the following procedures in order to reduce the risk for potential “Credit Not Processed” related Chargebacks:

For Ret


ail (Card Present) Merchants: Be sure to have you your refund/cancellation policy clearly printed within close proximity to the signature line on the Credit Card receipt. This includes “no refunds” and/or “in store credit only” return policies in addition to cancellation fees and/or restocking fees.

For Internet Merchants: If you use a website to sell merchandise and/or

services and accept Credit Cards using the Internet, your refund/cancellation policy should be displayed on your “check-out” screen along with an “I agree” check-box that the customer must click on in order to complete the transaction. This includes “no refunds” and/or “in store credit only” return policies in addition to cancellations and/or restocking fees.


Page 21 of 26

Recurring Transactions

nt.

Initially accepting a Credit Card to open a Customer Account and subsequently billing the same Card in regular intervals (i.e. monthly) in order to sustain a membership or subscription is also known as “Recurring Billing”. This is an acceptable practice as long as your customer gives you permission to bill their Credit Card on a regular basis. IF:

• Your Customer requests that you cease billing their Credit Card: You must immediately stop billing the Credit Card in question. All subsequent charges to that Credit Card will be subject to a Chargeback for “Cancelled Recurring Transaction” with no recourse on your part.

PLEASE BE ADVISED: Regardless if your Customer has a signed contract with your business, once they advise you to cease billing that particular Credit Card, whether by telephone or by written notification, you must stop billing that card. If you wish to pursue monies owed to you due to contractual obligations, you must contact your Customer directly to obtain reimburseme

Duplicate Transactions

In order to avoid duplicate transactions that may result in “Duplicate Processing” related chargebacks, you should adhere to the following precautions:

• Process one transaction at a time through your point-of-sale terminal. • Balance your deposits and check your batch totals at the end of every

business day to ensure that each of your Credit Card customers were not billed twice.

• Create a separate invoice describing each purchase if a customer makes more that one purchase in a given day or makes several purchases with duplicate amounts.

• If you discover that you have erroneously charged a Customer’s Credit Card more than once, you should immediately credit the Cardholder’s Credit Card for the amount(s) over billed.


Page 22 of 26

Merchandise/Services Not Received


If a Customer does not receive their merchandise or services, they may pursue a “Non-Receipt of Merchandise/Services” Chargeback. In order to reduce the potential for this type of Chargeback, please adhere to the following procedures:

According to Visa/MasterCard Operating Regulations, all goods or services that were not immediately delivered at the point-of-sale must be delivered BEFORE charging the Customer’s Credit Card.

Once merchandise has been shipped or services have been rendered,

you must obtain signed proof of delivery of goods or services.

Installment Transactions: Goods and/or services must be delivered BEFORE the first installment is billed to the Customer’s Credit Card. Installment charges must be billed to Cardholder’s in regular intervals (i.e. monthly on the same date each month)

In order to process a “Non-Receipt of Services/Merchandise”

Chargeback, the Customer must have made a valid attempt directly with your business to resolve the dispute BEFORE processing the Chargeback. In the event that this type of Chargeback is processed against your business, please indicate in your rebuttal letter if and how your Customer contacted you to resolve the dispute.

The Chargeback timeframes for “Non-receipt of Merchandise/Services”

can be extended from the expected date of delivery. Try to keep delivery timeframes short in order to prevent Chargebacks for transactions that occurred in the distant past. This includes vouchers and gift certificates that will not expire for several years.

If the merchandise purchased needs to be customized or specially

ordered, please be sure to indicate, “Custom Order”, “Deposit”, or “Special Order” on the signed invoice.

Please remember, that according to Visa/MasterCard Operating

Regulations, it is the Merchant’s responsibility to ensure that merchandise is delivered to the proper address and is received by the Customer.


Page 23 of 26

Cardholder Disputes Quality of Merchandise/Services


If a Customer feels that service or merchandise was received in an unsatisfactory condition (Defective) or if they feel the service or merchandise they received was not what they expected (Not As Described), they can initiate a Chargeback. These types of Chargebacks are not easy for you, the Merchant, to challenge, but if you adhere to the following guidelines, it will not only help reduce potential Chargebacks but assist you in reversing existing Chargebacks:

Be sure to keep a detailed Invoice and/or “Bill of Lading” detailing exactly what Merchandise was to be received or what Service was to be rendered. Include dates, times, locations, item colors, sizes, etc….

Make sure all delivered items are packed properly and that the goods

are suitable for the purpose for which they were sold. Please remember, that according to Visa/MasterCard Operating Regulations, it is the Merchant’s responsibility to ensure that merchandise is delivered to the proper address and in perfect condition.

Please remember, that the Customer must have made a valid attempt

directly with your business to resolve the dispute BEFORE processing the Chargeback. Always try to resolve the dispute directly with your customer and be sure to keep accurate records of all of your attempts to satisfy your Customer’s dispute including names, dates, and times.

Please be advised that for theses types of Chargebacks, your business’s

Return/Refund policy cannot be enforced and the Cardholder must be reimbursed for the full original amount in the event that the Chargeback is valid (unless a partial amount is being disputed).


Page 24 of 26

Chargeback Reduction Tips for Quality Disputes (continued)

In regards to Automobile/Mechanical Repairs, please be sure to state the exact parts ordered and the service that was performed properly (i.e. Work Invoice) along with a detailed account of your attempts to resolve the dispute directly with your Customer.

In regards to Hotel stays, please be sure to indicate if your Customer

actually stayed in their room for any nights and how many. If your Customer actually stayed any nights but did not stay for the entire intended reservation, they may due a partial refund.

For internet merchants, the merchandise and final prices should match

the description provided on the website.

If there is not a written description of what was ordered and it was placed via the telephone, the cardholder’s written description of what was expected will prevail.


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Additional Acceptance Tips

When comparing signatures between and transaction receipt and the back of a Credit Card, please be sure the name embossed on the card matches the signed name and also (if applicable) match the embossed name to the name printed on the terminal receipt. If any of these factors do not match, you should not accept the Credit Card.

If you notice that the back of the Credit Card is not signed, please request an

additional signed piece of photo identification. If you feel that the Customer has properly identified them self, have them sign the Credit Card while you are present. If your Customer refuses to sign their Credit Card, you should not accept the Credit Card for payment at that time. Please be advised, that only if the back of the card is not signed or are instructed by an authorization center representative are you allowed to request an additional piece of signed photo identification.

When attempting to obtain an authorization, if you receive a “Decline” code that

indicates that the Issuing bank is refusing to accept the transaction. You should not continue to attempt to obtain an Authorization code by repeatedly decreasing the Authorization amount. You should return the Credit Card back to your Customer and request another form of payment.

If you are suspicious of a particular Credit Card transaction while attempting to

complete a sale, contact your designated voice authorization center and request a “Code 10”. The representative will ask you several questions that will not alert the Cardholder. Once the questions are completed, the representative will then give you further instructions on how to complete the transaction.

Please be sure that your terminal is properly batching out on a daily basis. You

should also check your business checking account on a daily basis and make sure you are receiving your daily deposits. If you are not sure how to check if your terminal is batching out properly or if you discover that you are not receiving your daily Credit Card deposits, please contact your Customer Service Center.

It is a violation of Visa/MasterCard Operating regulations to require a minimum

or maximum transaction amount as a condition for accepting a Credit Card.

An invoice or contract signed by the Cardholder waiving their right to process a chargeback against the transaction is not permitted and cannot be used to reverse a chargeback.


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Contact Information

The Chargeback Processing Center is dedicated to providing quality-experienced assistance to all inquiries in reference to chargebacks and retrievals. From explaining the type of documents that need to be provided for a retrieval request to status inquiries of a chargeback case, our courteous and knowledgeable staff will gladly assist you in all your questions. Please contact us directly by phone: 1-800-999-8674 Monday-Friday, 9:00AM – 6:00PM EST Additional inquiries may be sent via email: [email protected] All responses to Retrieval Requests or Chargebacks can be mailed to: Chargeback Processing Center 515 Broadhollow Road Melville, NY 11747-3709 or faxed to: 516-962-7834

understanding and preventing chargebacks and retrievals

Documents